Neutral Citation: 2000 ONFSCDRS 130
FSCO A97-000566
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
ROBERT SCHIHL
Applicant
and
CANADA LIFE CASUALTY INSURANCE COMPANY
Insurer
DECISION ON EXPENSES
Before:
David J. Evans
Heard:
By telephone conference call on March 17, 2000.
Additional submissions were received on March 28 and May 8, 2000
Appearances:
Robert Schihl
Luke C. Mullin for Canada Life Casualty Insurance Company
Issues:
The Applicant, Robert Schihl, was injured in a motor vehicle accident on September 8, 1992. In a decision dated May 28, 1999, I dealt with his claims for statutory accident benefits under the Schedule.1 I made the following orders, while reserving on the issue of the expenses of the arbitration proceeding:
Canada Life Casualty Insurance Company shall pay Mr. Schihl weekly income replacement benefits from May 6, 1996.
Canada Life Casualty Insurance Company shall pay interest on outstanding amounts pursuant to section 24(4) of the Schedule.
Since Mr. Schihl was successful in his claim, Canada Life did not dispute his entitlement to expenses. They did, however, dispute the amount of his claimed expenses.
The issue in this further hearing, therefore, is:
- What is the amount of expenses incurred in respect of this arbitration proceeding to which Mr. Schihl is entitled?
Result:
- Canada Life Casualty Insurance Company shall pay Mr. Schihl's arbitration expenses in the total amount of $11,482.68.
EVIDENCE AND ANALYSIS:
Mr. David F. Longley represented Mr. Schihl at the substantive hearing of this matter, but not at the oral expense hearing held March 17, 2000. Mr. Schihl initially claimed interest on his expenses. I requested further submissions on this issue, to which the Insurer responded. Subsequently, by letter dated May 3, 2000, the Applicant withdrew the claim for interest on his expenses. I find that Canada Life is entitled to a reduction in the award of $150 for its costs thrown away.
Mr. Schihl submits that Canada Life agreed to pay his claimed expenses in their entirety. However, Mr. Schihl based his claim on Mr. Longley advising him that there would be "no problem" with recovering the expenses. I have reviewed the correspondence between Mr. Longley and Canada Life. It shows that the parties were prepared to discuss the Statement of Expenses, but there is no documentation to show that they ever agreed upon the expenses. Accordingly, I find that there was no agreement by Canada Life to pay Mr. Schihl's expenses in their entirety.
Canada Life disputes the Applicant's claimed hourly rate of $150 for his counsel. The Insurer referred me to earlier decisions, including my own, in which only the Legal Aid maximum was allowed, but these preceded the amendments to the Dispute Resolution Practice Code. The third edition of the Code, which applies to all existing and new cases as of April 15, 1997, provides in Rule 76.1 that an hourly rate of up to $150 may be awarded for the Applicant's legal fees "where an adjudicator is satisfied that a higher amount for legal fees to an insured person is justified." Second, cases decided subsequent to the Practice Code amendments have allowed higher hourly amounts. The range is fairly wide: $100,2 $110,3 $1254 and $150.5 In Sheikh ($125) and Blake ($150) the Insurers did not dispute the higher rates.
Arbitrator Palmer discussed the principles behind her award of $150 in Tustin. She believed that Rule 76.1 was changed to recognize the considerable difference between the Legal Aid Rate and what experienced counsel actually charge their clients, meaning absent the amendment the burden of largely bearing one's own legal expenses would make success at the substantive hearing a pyrrhic victory for an applicant. She continued as follows:
In order to award the $150 hourly rate an adjudicator need only be "satisfied" that a higher amount for legal fees is "justified." In my view, the $150 hourly rate can be awarded equally in circumstances where the claim is complex and requires superior skills of representation or in circumstances where an experienced advocate has attended on a hearing, leaving a sizeable gap between his or her fees per hour and the hourly rates accorded under the Legal Aid Act. This provision facilitates access to justice for all applicants and their access to experienced counsel.
On the other hand, Arbitrator Sampliner did not accept in Hall the Applicant's claim that his counsel was entitled to the $150 maximum rate due to the necessity of using experienced counsel to address the matter where the evidence concerning the single issue was not complicated.
In the present case, the issue was Mr. Schihl's entitlement to benefits more than 156 weeks after the accident under the Schedule. Mr. Longley's knowledge of the caselaw regarding this issue and his experience in presenting a case briefly and concisely were apparent. However, this was not a case involving multiple, complex issues. InMatichuk, Arbitrator Baltman held as follows:
Although the issues in this case were not complex, both Mr. Potestio and Mr. Demeo have been in practice for over 15 years. The hearing was presented efficiently. I find that an hourly rate of $110 is reasonable.
I find this case similar. I also find that since Mr. Longley's expertise resulted in a much shorter hearing, this is a reason to significantly increase his hourly rate.
The hearing lasted 1.5 days. I allow the 12 hours claimed for day 1, March 15, 1999, but only 4 hours for day 2 for a total of 16 hours. Mr. Longley's claims 104.55 hours in total. As in Matichuk, these include legal fees for mediation and other matters that preceded the filing for arbitration, which previous cases have disallowed. I agree with these decisions, as the Insurance Act only provides me with jurisdiction to award expenses in respect of the arbitration proceeding, itself. Furthermore, this total claimed represents a ratio of over 5 hours preparation for every hour of hearing, which I find excessive for this manner of case. By comparison, MacAulay involved twelve issues heard over five and a half days with extensive and complex medical evidence:
Mr. Howie's time for preparation and attendance at that hearing was 90.2 hours.
In Henri,6 Arbitrator Makepeace noted that depending on the circumstances of the case, arbitrators have found a ratio of between one and four hours of preparation time to one hour of hearing time to be reasonable. Counsel for Canada Life suggested a ratio of 2.5 to 1. However, I have set the ratio at 3 to 1 because the case relied to a large extent on documentation, so Mr. Longley had to spend a considerable amount of time in preparation. I allow a total of 64 hours (16 hours for attendance at the hearing and 48 hours for preparation).
As for the disbursements, Canada Life has provided invoices showing that items 6, 8, 11 and 16 have been paid, reducing the total by $561.70, which I accept. In addition, the amounts for Dr. Kekosz and Dr. Ogilvie-Harris should be reduced to reflect the maximums allowed. I find that item 5 contains either a typographical error or a double-billing for the North Oshawa Medical Centre hospital records, as the amount of $277 appears twice.
I award the total of $11,482.68, based on the following calculation:
Fees:
64 Hrs. @ $110 per hour
$7,040.00
GST
$492.80
$7,532.80
Correspondence:
61 letters sent @ $10
$610.00
25 letters received @ $7
$175.00
$785.00
GST
$54.95
$839.95
Disbursements:
- Photocopying
300 @ .25
$75.00
GST
$5.25
$80.25
- Postage
3 @ .46
$1.38
56 @ .45
$25.20
5 @ .43
$2.15
$28.73
GST
$2.01
$30.74
- Courier
$15.18
GST
$1.06
$16.24
4 Filing for Arbitration
$100.00
5 North Oshawa Medical Centre
– hospital records
$277.00
– report
$200.00
– notes
$50.00
7 Dr. R. Richards
– clinical notes
$50.00
– report
$500.00
9 Dr. V. Kekosz
– report
$800.00
GST
$56.00
$856.00
10 Dr. H. McDonald
– notes
$40.00
12 Dr. D. J. Ogilvie-Harris
– report
$800.00
GST
$56.00
$856.00
13 Sports Medicine and Rehab
– notes
$50.00
14 Dr. H. Mason
– notes
$90.95
15 Dr. R.C.B. Webster
– notes
$36.00
17 Dr. P.C. Fang
– notes
$26.753
Total Disbursements:
$3,259.93
Total Fees and Disbursements:
$11,632.68
Costs thrown away
-$150.00
Total Award
$11,482.68
July 13, 2000
David J. Evans Arbitrator
Date
Neutral Citation: 2000 ONFSCDRS 130
FSCO A97-000566
FINANCIAL SERVICES COMMISSION OF ONTARIO
BETWEEN:
ROBERT SCHIHL
Applicant
and
CANADA LIFE CASUALTY INSURANCE COMPANY
Insurer
ARBITRATION ORDER
Under section 282 of the Insurance Act, R.S.O. 1990, c.I.8, as amended, it is ordered that:
- Canada Life Casualty Insurance Company shall pay Mr. Schihl's arbitration expenses in the total amount of $11,482.68.
July 13, 2000
David J. Evans Arbitrator
Date
Footnotes
- The Statutory Accident Benefits Schedule — Accidents On or Between June 22, 1990 and December 31, 1993, Regulation 672 of R.R.O. 1990, as amended by Ontario Regulations 660/93 and 779/93.
- Hall and Zurich Insurance Company (FSCO A96-001624, April 7, 2000), Arbitrator Sampliner
- Matichuk and Commercial Union Assurance Company (FSCO A98-000318, February 17, 2000), Arbitrator Baltman
- MacAulay and General Accident Assurance Company of Canada (FSCO A96-001971, letter decision October 22, 1999), Arbitrator Renahan; Sheikh and Liberty Mutual Insurance Company (FSCO A98-001038, letter decision February 22, 2000), Arbitrator Allen
- Tustin and Canadian General Insurance Group (FSCO A97-001209, February 21, 2000), Arbitrator Palmer; Blake and Jevco Insurance Company (FSCO A98-000102, May 2, 2000), Arbitrator Alves
- Henri and Allstate Insurance Company of Canada (OIC A-007954, August 8, 1997)